Computer network firm enlists Xerox executive.

Computer network firm enlists Xerox executive

Company says move provides boost for image, future

Advanced Software Technologies Inc., an El Segundo-based computer software company, last week named the president and chief executive officer of Xerox Technology Ventures, Robert V. Adams, as a director of the company.

"Mr. Adams provides an incredible amount of knowledge on marketing," said ASTI President Patrick Panzarella, 24. "If Mr. Adams puts his name on your company, you must have something interesting."

Adams is a 25-year Xerox Corp. employee who last year was named to form Xerox Technology, an El Segundo-based venture capital arm of the office machine giant. He has also been an outside director of two other local computer companies since 1988: Teradata Corp. of Los Angeles and Tandon Corp. of Moorpark.

Adams has become a director of ASTI for personal reasons, said a Xerox spokesman; ASTI is not one of the companies for which Xerox Technology has provided seed money.

Teradata is a database computer manufacturer with revenues and profits that have grown from nothing to more than $100 million in the past few years. Tandon is a $378 million (annual sales) desktop computer manufacturer that recently reported its first profitable quarter in two years.

ASTI's main product, MAGIX, is a software package designed to network personal computers together in a way that can replace expensive mainframes, said Panzarella.

A form of MAGIX was originally developed in the mid-1970s by a group of computer mainframe systems software engineers working for what was then the computer division of Xerox Corp., according to ASTI literature. When Xerox sold the bulk of its computer business to Honey-well in 1976, the engineers again worked on the software until three key members of the development team broke away and formed their own company, Sabaki Enterprises. They developed a software for the then-new PC local-area network market.

At that time, Science Dynamics Corp., owned by Panzarella's father, Santo, commissioned Sabaki to create a product for the health care industry. MAGIX was born of that effort, and Santo later sold Science Dynamics, along with some of the rights to MAGIX, to McDonnell Douglas.

The younger Panzarella, who had observed his entrepreneur father produce rock music shows and other ventures, bought Science Dynamics back in 1988 for his senior project for the Entrepreneur's Program at USC. He also bought Sabaki for the remaining rights to MAGIX, and renamed Sabaki to Advanced Software Technology and became president of the company. (Santo is now chairman of ASTI.)

MAGIX, said Panzarella, is being used in 1,000 different client sites throughout the United States and New Zealand. The software is mostly sold to Value-Added Resellers, or computer products resellers that offer services such as networking, and systems integrators, or consultants who coordinate the use of different types of computers within a company. Establishing local-area networks is estimated by experts to be a multi-billion dollar industry in the United States.

Currently, while the array of computer systems available for offices can seem as complex and abstract as the insides of a computer itself, an estimated 20 percent of all personal computers are linked together in local-area networks.

One advantage of local-area networks is the capacity to link different types of computers together. The MAGIX software is limited in this respect, as it can only connect computers that are made with Intel brand microchips (the brains of the computer). An advantage of MAGIX is that it allows a client to standardize the type of programs that all its computer users have, so that one computer has no trouble communicating to another, said Panzarella. For example, MAGIX has its own database, or list management, program that is a standard for a MAGIX network.

Those wanting to install different software programs into their PCs, such as Ashton-Tate's dBASE products, still may, but those programs would not be part of the MAGIX network. The program can co-exist with another disk operating system, the master program in a computer that manages the files in a computer, files that may in turn contain other software programs.

MAGIX software can also be used to link local-area networks through the telephone lines to each other across the country, creating wide-area networks.

ASTI is placing itself in competition with Novell Inc. of Provo, Utah, a $280 million (1989 sales) network software company that is probably the largest such company in the world. Locally, it is competing with Santa Monica-based Retix, a private company with about $35 million in yearly sales that allows different computer systems to connect with other proprietary systems, protecting confidential information.

It may also face competition from UNIX, a disk operating system developed 26 years ago by Bell Laboratories that has recently seen a resurgence in popularity, according to Warren S. Reid of Encino-based WSR Consulting Group.

The UNIX operating system allows a powerful PC to link to other "dumb terminals," or screens that don't have their own memory, creating a sort of mini-mainframe computer. Local area networks, on the other hand, require that a special computer called a "file server" be dedicated to coordinating the network and each terminal be "smart," said Reid.

Panzarella said he is is not worried, however, because UNIX requires a powerful computer with a lot of memory, which is expensive, and being geared towards engineers is not as user-friendly as MAGIX, he said.

Despite the obstacles ASTI faces, said an associate of Adams, "I think [Adams] has a very good vision of where the technology industry and the office ought to evolve. . .I'm sure he believes [ASTI] has something the market is looking for."